Energy Sucks

Tale of the Tape

Good evening, everyone. Happy Tuesday. 

The markets were fairly quiet. All major indices fell but no index lost more than 0.5%.

Communications was the only green sector. Energy continued to suck. More on this below.

A handful of stocks rallied. Snapchat made a 2-month high. Peloton closed over $100 for the first time ever. Solar shined.  

JP Morgan will pay $920M to resolve spoofing claims.  

The consumer confidence report had its biggest gain in 17 years.

Here are the closing prints:

S&P 5003,335-0.48%
Russell 20001,504-0.37%
Dow Jones27,452-0.48%

JP Morgan Spoofed

JPMorgan Chase will pay $920M to settle its spoofing case with the US Justice Department. 

The US bank faces charges of market manipulation after making fake trades with precious metals and treasury futures. 

Between 2008 and 2016, tens of thousands of orders for various futures were canceled by JPMorgan traders to spoof markets.

FBI Assistant Director William Sweeney Jr. said: 

Today’s deferred prosecution agreement, in which JP Morgan Chase and Co. agreed to pay nearly one billion dollars in penalties and victim compensation, is a stark reminder to others that allegations of this nature will be aggressively investigated and pursued. 

Here’s Forbes with more

Energy Sucks

Energy nearly lost another 3%. It’s the worst performing sector thus far in 2020.

Energy is down 47% YTD. Real estate, the second worst sector, is only down 14% YTD.

Here’s the YTD performance of the sectors:

And here’s a ratio chart of the energy ETF $XLE relative to the S&P 500 ETF, $SPY.

$XLE has never underperformed $SPY to this degree. Should we be worried? Time will tell.

We’ll also include a ratio chart of the financial sector relative to the S&P 500.

$XLF/$SPY is below its March 2009 low. Whoa.

Fake Meat. Real Highs.

Beyond Meat ($BYND) had a day. The fake-meat maker said that Walmart will expand distribution of the Beyond Burger to 2,400+ stores nationwide next week.

Beyond’s plant-based meat products are available in ~112,000 retail and food-service locations worldwide.

$BYND closed at a 13-month high. Here’s the daily chart:

US Energy Corp Acquisition

U.S. Energy Corp. ($USEG) ripped after the company announced an asset purchase agreement with FieldPoint Petroleum Corporation to acquire operated and non-operated production assets in Converse County, Wyoming and Lea County, New Mexico.

U.S. Energy CEO, Ryan Smith said this in the press release:

We are pleased to announce this acquisition, which represents U.S. Energy’s second acquisition of 2020 and follows our previously stated strategy of seeking to acquire assets that represent mature, PDP-heavy Properties which we believe have significant upside potential from existing operations.

As we continue to execute our consolidation strategy moving forward in 2020 and into 2021, U.S. Energy will continue to pursue attractive opportunities that allow for capital efficient growth and increased shareholder value, while maintaining a low-cost corporate structure and clean balance sheet.

$USEG was up 56% but closed down 61% from its opening print. Here’s the 5-min chart:

🌌 Stocktwits After-Hours

Today on After Hours:

Walmart Wants More Beyond Meat
Palantir and Asana Direct Listing Preview
Regeneron COVID Cocktail Update

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Earnings Tomorrow

Be sure to know when your stocks report earnings. Here’s the earnings calendar.

Links That Don’t Suck

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🤙 These Handmade Driving Machines Are Like Nothing Else on the Road

🎧 David Yarrow on Art, Markets, Business, and Combining It All 

🎥 LeBron James Signs Four-Year Film Deal with Comcast’s Universal

🧼 No, This Isn’t a Repeat of the Dot-Com Bubble